Housing Development will seek to raise $600 million for
residential and commercial projects in India’s largest cities,
starting with an investor roadshow in Singapore from November,
said one of the people, declining to be identified before a
public announcement. Mahesh Shah, a Mumbai-based spokesman
for HDFC, declined to comment.

Property demand has weakened in India’s biggest cities
as the country’s central bank has raised the benchmark
interest rate 12 times since March 2010 by a total of 350
basis points. That’s the fastest round of increases since the
Reserve Bank was established in 1935, Bloomberg data show,
and it’s left developers with a shortage of cash and
expensive debt.

Raising money shouldn’t be difficult for Housing
Development, given its credentials, Pranay D. Vakil, chairman
of real-estate agency Knight Frank India Pvt. Ltd. said.
“The more difficult problem these days is deploying money in
the right kind of assets. A lot of funds have deployed money
and not all of them are successful.”

Housing Development will mainly tap investors from the
Asia-Pacific region and the U.S. for the private equity fund,
said one of the people. The Mumbai-based company aims to
invest about 40 percent of the fund in residential projects
on the outskirts of India’s largest cities, and as much as 30
percent in commercial developments, said one of the people.

Three private equity funds have raised a combined $248
million for India-focused real estate investments in the
first nine months of this year, according to data provided by
Venture Intelligence, a Chennai-based research service. That
compares with $75 million raised by one fund in 2010, it said.